New car registrations fell by around 29.4% in the UK last year, with the 1,631,064 cars sold the lowest total since 1992, as the industry was hit hard by the effects of Covid-19 lockdowns. But new sales of both electric cars and plug-in hybrids both rose sharply, with plug-in cars now accounting for more than 10% of UK sales.
Data from the Society of Motor Manufacturers and Traders (SMMT) reveals 680,076 fewer new cars were sold in the UK last year than 2019, the largest year-on-year fall since 1943.
The bulk of the sales decline in 2020 was attributed to the first lockdown, from March to June last year, when many dealerships were shut. Although sales fell during the second lockdown, in November, dealerships were able to continue offering ‘click and collect’ online sales – which will also be allowed during the current lockdown introduced in England by the UK government.
Before the pandemic began, the SMMT estimated around 2.2 million cars would be sold in the UK last year. The final figure represents a loss to the industry of around £20.4 billion and a £1.9bn loss to the UK government in VAT receipts.
“There’s no surprise it was a very, very difficult year,” said SMMT chief executive Mike Hawes. “These are unprecedented levels and it’s challenging the industry continuously.”
While the overall figures are grim, there are some positive signs for the industry. Sales of battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs) both increased substantially. Those rises will be viewed against a backdrop of the UK’s intention to ban sales of all non-zero-emission cars, with the exception of certain hybrids, by 2030.
How Covid-19 impacted the UK industry in 2020
Hawes said the UK car market outperformed Spain but fared worse than Germany, France and Italy, adding: “It’s notable that those countries had some form of incentive [for buyers, to boost new cars sales], sometimes confined just to PHEVs and battery-electric vehicles.”
The sales decline was particularly sharp in the fleet and business sectors. While sales of private cars fell 26.6%, fleet sales dropped 31.1% and business sales slumped 43.3%.
Aside from specialist sports cars (up 7.0%), every sector of the market declined in terms of total sales last year, but some performed better than others. Sales of superminis showed the smallest fall in total sales and their overall market share grew from 29.7% to 31.2%.
EV and PHEV sales increase dramatically
The rise in the number of BEVs and PHEVs on sale in the UK helped to significantly increase sales of both last year. A total of 108,205 EVs were sold, representing a 185.9% year-on-year increase and rising from 1.6% of the overall UK car market to 6.6%. Meanwhile, PHEV sales rose 91.2% to 66,877, increasing from 1.5% of the market to 4.1%.